All Forum Posts by: Kent Braaksma

If you are buying a tax lien from a bank, it is probably on the secondary market. A lot of the big investment banks buy as many liens as they can at the tax sale. They hold the lien for a period of time (to collect the interest), then sell the lien on the secondary market, to avoid the foreclosure process. Check the sale date on the lien you are looking to purchase. The lien # will tell you the year it was purchased, ie: #19047 was purchased in 2019, 18047 was purchased in 2018, etc. Be very careful when buying these liens, as these big banks/corporations do not do thorough research on the liens before they buy them. Their strategy seems to be, buy all liens possible, then dump what they can before the foreclosure process. With this strategy, the better liens will outweigh the bad liens, making them money overall. In the 10 years that I have been buying liens in Iowa, I have seen more and more of these big banks/corporations each year. They are effectively squeezing out the small investors. 

This same situation is happening in Iowa. Being a bid-down of ownership state, a lot of the tax liens purchased on-line are selling for 1% ownership. I have no idea how this would play out if you had to actually foreclose on a tax lien, and haven't had a chance to talk to the legals about it yet. My assumption is that at 51% ownership, you should be able to force the sale of the property. I don't know what could be done at less than 51% ownership.

@Jeremy Goemaat...I looked at these counties the day before the auction. I don't know about the redemptions, but these were the absolute 2 worst counties in the sate to invest in. 

In the county I attend live, I know the treasurer very well. She tells me that she wants to stay with the live auction as long as possible. She prefers the local investors, rather than the big corps and out-of-state investors. If a local investor acquires a property, they tend to  revitalize it and get it back on the tax roll, where as, the big corp/out-of-state investor tends to let the property set.

I tend to agree with you, I have been checking the Colorado market (auctions are later in the year). Texas Tax Deeds have peaked my interest as well! That might just be the way to go, moving forward 

I only saw 2 counties, on-line, that had less bidders registered than parcels available.  Some of them had twice as many bidders as parcels. I noticed, in one county, there was one entity that had 200 bidders registered (most likely an Investment Bank, or huge holding company). I did register in one of the counties. I placed bids on 23 parcels, some were bid down to 51%. When the auction was in process, it showed that I was tied with 6-8 other bidders on all of the parcels. I got nothing! 

Over the last couple of years, the county I attend the live auction in, also has had a steady increase of bidders. Again, mostly Investment Banks/Holding Companies. I usually send 10 bidders to this auction. Normally I can buy 18-21 liens in this county and spend aprox. 18k. Everything is usually sold at 100%. This year, I could only get 15 liens @ just over 13k.

According to my calculations (with a $45 registration fee) each bidder would need to purchase $2250 in tax liens, to guarantee a profit in the second month. In the case of Polk County, the actual registration fee is $125 + $45 "agent fee" = $170 per bidder number. You would need to purchase $8500 per bidder number, to guarantee a profit in the second month.

My guess is that the strategies of these big corporations is to register a huge number of bidders, then hire some 18-20 year old school kids to go to the live auction and say "yes" anytime there name comes up, or buy as many liens as possible on the on-line auction, hoping they get more good liens than bad ones, so they can hopefully make enough to cover the fees and make a profit. If the liens weren't redeemed, they would either sell them on a secondary market, or just walk away from them, depending on the parcel.

It all seems to be playing the odds, and hoping for the best

My investors would NEVER go for that!!

Most lists won't come out until the first week in June. After that, you will see the lists populate in each county. Also, the counties publish these lists in their local newspaper.

Thanks Ned, I will check that out!

Yes, all live auctions take place on the 3rd Monday in June. I have been trying to figure out some kind of a chat app, maybe with a tally board attached, to be able to update as the sale progresses.

I have been buying Iowa tax liens for a small investment group for the past 10 years. So far, it has worked out very well for the investors. Most of what I have been buying has been at live auctions, where I will send multiple bidders to a single county. I can usually end up with 18 - 25 liens and invest all, or most of, the available cash. However, with the growth of the investment group, as well as the increase in available funds, I find myself looking to expand into other counties, and have been researching options in other state's concerning Tax Sale Certificates. 

With Iowa being an ownership bid-down state, rather than an interest bid-down, I am not  fond of delving into the on-line auctions. Most that I have researched, have had more registered bidders than available parcels with a lot of the parcels being bid down to 1% ownership (which I will never understand). I can send bidder groups to multiple live-auction counties, but run the risk of overbuying and not having the capitol to cover the liens purchased, do to the inability to communicate between the groups as to the amount being spent at each auction. 

Is there anyone buying Iowa tax liens, that would be willing to share experiences, concerns, or issues?

There are a few books out there with the information you are looking for. The Tax Lien Lady has a book in PDF format that lists all of the tax offices. You might, also, try 

www.tax-lien-certificates.net

They have information for all tax deed and tax lien states with interest rates.

Thanks Chris! Sounds like a good place to start